Timeline and discount depth: the grid
A markdown policy involves two distinct decisions: when to trigger each markdown tier, and by how much. Treating them separately, without a common framework, leads to inconsistencies across stores.
30 to 40 percent of the clothing produced worldwide is sold at a discount or never sold at all (McKinsey). The purpose of BOOPER’s Markdown & Clearance module is to automate this discount schedule and its triggering.
A price reduction is often—and mistakenly—reduced to a single question: by how much should the price be lowered? In reality, two factors come into play: timing and the extent of the discount. When laid out in advance in a grid, they turn the price reduction into a predictable process rather than a panic-driven reaction.
One decision, two dimensions
A markdown policy is often—and mistakenly—reduced to a single question: “By how much should I lower the price?” In reality, two distinct factors come into play:
- The schedule: At what points in the season does the adjustment take effect, and based on what trigger (a fixed date or a deviation from the observed flow rate)?
- The depth: By how much does the price decrease at each tier, and should this depth be the same for all categories?
Treating these two aspects separately, without a common framework, is the most common source of inconsistency between stores or between categories within the same retail chain.
Why Improvisation Is Expensive
According to the State of Fashion study by McKinsey & Company (BoF-McKinsey), 30 to 40 percent of the clothing produced worldwide is sold at a discount or remains unsold—a strong indication that, for a large part of the industry, the timing and depth of markdowns are still being managed too late or in an overly uniform manner.
Of the clothing produced worldwide , a significant portion is sold at a discount or never sold at all—a sign that the timing and depth of markdowns remain largely underutilized in the sector (McKinsey & Company, State of Fashion).
A markdown schedule established in advance does not guarantee that all markdowns will be avoided; it ensures that every markdown applied is a deliberate decision, not a reaction.
Create a markdown schedule
The schedule answers a simple question: When does the next discount tier take effect? Two approaches coexist, and are often combined:
- The fixed-date calendar: milestones known in advance (weeks 4, 8, and 12 of the season), which are easy to communicate and implement in stores.
- The flow deviation-triggered schedule: The price adjustment is triggered when the actual flow rate deviates from the target trajectory, regardless of the date.
Most established retailers combine the two; see also our article on margin vs. turnover rate arbitrage.
Calibrate the reset depth
The discount depth (the magnitude of the price reduction at each tier) should never be a single value applied across the entire catalog. Three factors cause it to vary:
- The elasticity of the benchmark: the more strongly demand responds to a price decrease, the less depth is needed to trigger the desired volume of sales.
- Time remaining until the deadline: The same amount of remaining inventory requires a deeper discount if the remaining sales window is short.
- The residual value if the product remains unsold: the more expensive the final clearance sale is, the more economically justifiable a deeper interim discount becomes.
An example of a tiered grid
Level 1: Slight discount
The first sign of a slowdown in sales: a moderate price reduction (around -20%) to test the market's reaction without unnecessarily eroding the margin.
Tier 2: Intermediate discount
If the flow discrepancy persists: a steeper discount (on the order of -40%), triggered at a predetermined milestone.
Stage 3: Final discount
As the deadline approaches: a steep discount (in the range of -60% or more) to move inventory before the end of the sales window.
Final Release
For the remaining stock not sold even at the maximum discount: group liquidation, donation, or destocking to a secondary channel, decided in advance, not in an emergency.
These order-of-magnitude figures (-20%, -40%, -60%) are indicative, not a universal standard: the appropriate scale is based on the actual historical data for each category.
The back-to-school season provides a textbook example of this tiered pricing strategy applied to a very short sales window: our guide to back-to-school pricing for 2026 details how to plan an opening tier, an intermediate tier, and a closing tier even before the sales period begins.
What the market figures reveal: Markdowns are no longer the exception
Long treated as a last-resort measure at the end of the season, markdowns now play a fundamental role in the revenue of many retailers, particularly in the apparel sector.
Of all clothing purchases made in France in the first half of 2025, a certain percentage, by value, were made during sales or promotions (French Fashion Institute, IFM Consumer Barometer).
When more than one-third of sales are made at discounted prices, the schedule and discount structure cease to be merely an end-of-season tool and become a full-fledged margin management lever, just like the full price. A retailer that continues to improvise its markdowns while one-third of its sales depend directly on them leaves a significant portion of its profitability to the vagaries of the schedule.
Adjust the clearance schedule based on the nature of the product
A single discount schedule applied across the entire catalog ignores a simple reality: not all product families age at the same rate or for the same reasons.
- Fashion and textiles: two legally mandated sales periods set at the national level, with unrestricted markdowns permitted the rest of the year following the relaxation of regulations introduced by the 2015 Macron Law.
- Fresh and organic products with a short best-by date: discounts are applied almost daily, based on the number of days remaining until the best-by date rather than on a seasonal schedule.
- Durable goods and home appliances: End-of-line items due to the supplier’s replacement cycle, which can occur at any time of the year, regardless of traditional sales seasons.
Applying the same pricing tier structure to these three approaches amounts to over-discounting certain products that could have been sold at full price for longer, and under-discounting others that needed a faster and deeper price cut.
Track the effectiveness of your markdown schedule over time
A schedule and a discount schedule are not set in stone at the start of the season; their effectiveness is measured on an ongoing basis using two easy-to-track indicators.
- The difference between the budgeted margin for the clearance sale period and the margin actually achieved: a recurring discrepancy in the same direction, season after season, indicates a poorly calibrated pricing structure rather than an isolated incident.
- The proportion of inventory that reaches the last level or the final stage: if an increasing proportion of SKUs consistently end up at the deepest level, the first level is likely being triggered too late.
These two indicators, when combined with turnover data by category, make it possible to adjust the schedule from one season to the next rather than simply carrying it over unchanged out of habit.
Additional Questions
What is the difference between statutory sales periods and unrestricted markdowns in France?
Sales periods are regulated periods, set at the national level with dates known in advance, during which selling at a loss is permitted. Markdowns made outside of these periods have been unrestricted since 2015, but they are governed by a ban on selling at a loss, except in specific cases. The two approaches complement each other: sales clear out end-of-season remaining inventory, while unrestricted markdowns allow for ongoing adjustments without waiting for the national sales period. See also our article on end-of-collection items and dormant inventory, which details how to identify affected products before it’s too late.
Should you align your markdown schedule with that of your competitors?
Blindly following a competitor’s schedule means being dictated to by their inventory turnover rate, which has no reason to match yours. It’s more useful to draw inspiration from key market dynamics—such as various promotional pricing strategies—while tailoring your own schedule to your internal data on turnover and margins by category.
FAQ
The questions we are most frequently asked before getting started.
No: Applying a uniform discount rate across the entire catalog is, in fact, the most common mistake. The discount rate should vary based on three factors specific to each SKU: its price elasticity, the time remaining before the deadline, and the cost of the final clearance sale if the product remains unsold.
A highly elastic product requires a smaller discount to trigger the desired sales volume, whereas a product that is less price-sensitive—or one with a rapidly closing sales window—may warrant a deeper discount level from the very first trigger. This is precisely the logic behind the three indicative price tiers presented in the article—20%, 40%, and 60%—which are intentionally not fixed values but rather orders of magnitude to be calibrated on a category-by-category basis.
Standardizing stock levels for operational convenience amounts to unnecessarily selling off certain items at a loss and underpricing others that will remain unsold: this results in a direct loss of revenue on the collection’s overall margin.
The two approaches complement each other; they are not mutually exclusive. A fixed-date schedule (week 4, week 8, week 12 of the season) provides a simple trajectory that is easy to communicate and implement consistently in stores, while triggering discounts based on deviations in sell-through rates allows for a discount to be implemented before the scheduled date if actual sales fall short of the target trajectory.
According to the article, most mature retailers develop a baseline schedule with fixed dates and then adjust it based on early triggers as soon as the sales gap exceeds a defined threshold—an approach that directly aligns with the trade-off between margin and sales velocity described elsewhere on the blog.
This approach avoids two extremes: a rigid schedule that identifies a problem too late—one that quickly spirals out of control—and a 100% reactive management style that makes logistics planning and on-the-ground communication unpredictable.
Three stages are generally sufficient: a slight markdown of about -20% at the first sign of a slowdown, an intermediate markdown of around -40% if the sales shortfall persists, and then a deep markdown of -60% or more as the deadline approaches.
In addition to these three stages, there is a final disposal plan established in advance for the remaining inventory that has not been sold even at the maximum discount: bulk liquidation, donation, or transfer to a secondary channel—decided before the end of the season rather than handled as an emergency. It is this anticipation of the final disposal that distinguishes a structured discount schedule from a series of improvised price cuts.
Increasing the number of tiers beyond three adds operational complexity without providing any significant improvement in management; conversely, relying on a single tier leaves too much leeway for individual judgment on a store-by-store basis.
No, and that is not its purpose. A discount schedule provides a default framework that establishes the trigger logic and discount depth in advance, but ad hoc adjustments are still necessary in response to unforeseen external events: a weather spike, a competitor’s price cut, or a change in foot traffic at a retail location.
The purpose of the grid is not to eliminate all human decision-making, but to turn markdowns into planned decisions rather than last-minute reactions. The article puts it plainly: a grid established in advance does not guarantee that all markdowns will be avoided; it guarantees that every markdown applied is a well-documented choice, not a panic-driven reaction.
For a retailer, this distinction is strategic: manual adjustments remain the exception that proves the rule—traceable and justified—rather than the norm that makes each store inconsistent with its neighbors.
Sources: McKinsey & Company, “The State of Fashion 2025” (BoF-McKinsey) (mckinsey.com) · Booper product data (GENIUS Promotions module, customizable discount grids).
The volume sold during a promotion does not indicate whether it created value: part of it comes from similar products (cannibalization), and another part from purchases that were simply brought forward.
Each promotional scenario must be costed out prior to launch using the same metrics: base sales, actual incremental sales, cannibalization, carryover, halo effect, net margin for the category, and cost per unit actually gained.
Margin-volume arbitrage can then be explained: a stated objective, visible forecasting factors, constraints adhered to, and a documented validation process.
A national food retailer with more than 1,700 stores and several million price points per year: With Booper, its pricing teams simulate the impact of each decision on margins, competitiveness, and price perception before implementing it.
Key takeaway: Pricing, promotions, and markdowns are three factors that constantly influence one another, but are still managed using separate tools at most retailers.
This fragmentation creates inconsistencies that are invisible in the short term (a muddled pricing image, margins eroded by promotions that aren’t properly coordinated with markdowns) but costly in the long term. Gartner has, in fact, formalized this convergence as a distinct market category: unified optimization of pricing, promotions, and markdowns.